State Rep. Chris Miller: New study shows impact of rising pension costs on Illinois communities

State Representative Chris Miller of the 110th District. Photo submitted by State Representative Chris Miller's office.

For Immediate Release – April 5, 2021

Springfield, IL – A new study shows how communities are losing ground when it comes to funding pensions and many communities are inching closer to the point of no return, according to State Representative Chris Miller (R-Oakland).

“Growing pension costs are limiting the ability of communities to provide basic services,” Miller said. “Many communities are reaching critical mass and unless something is done soon – many communities will never be able to recover from the damage being done. The pension crisis is real, and it is serious.”

Wirepoints, an independent, nonprofit company, providing original research and commentary about Illinois’ economy and government, has released a new report on the burgeoning pension crisis in Illinois communities. According to the report 102 of Illinois’ 175 largest cities get an “F” for their local pension crisis. Overall, 102 cities received “F” grades in 2019, 64 cities got a “D” grade and only nine cities received an “A,” “B,” or “C” grade. In contrast, two-thirds, or 120, of the cities analyzed received an “A,” “B,” or “C” grade in 2003.

Locally, Charleston went from a “C” grade in 2003 to an “F” grade in 2019 while Mattoon went from a “D” in 2003 to an “F” in 2019.

“If we don’t act soon, there could be dire consequences for communities that many of my constituents call home,” Miller said. “This report makes it abundantly clear that we can’t continue to ignore the pension crisis any longer. We need reform and we need it now.”

One of the problems is that most local pension funds have turned upside down – they now have more retirees drawing benefits than active workers contributing. In 2003, only 15 cities had more pensioners drawing benefits than active workers making contributions into the fund. In 2019, that number rose to 112 cities.

“The majority of Illinois legislators continue to dismiss the need for a pension amendment and subsequent reforms, and yet they refuse to give cities the option of municipal bankruptcy as a last resort. That’s handcuffing local officials from doing what they can to save their communities from collapse,” says Ted Dabrowski, President of Wirepoints. “If lawmakers do nothing, Illinois cities will continue to hollow out and slide toward insolvency.”

Miller also noted that at the state level six-figure salaries and pension payouts amounted to nearly $2 billion last year. In fact, Illinois public employees and retirees with $100,000 plus paychecks grew from 109,881 (2019) to an all-time high of 122,258 in 2020 which cost taxpayers $15.8 billion.

“What is going on in Illinois is unstainable,” Miller said. “At a minimum we need to stop making the problem worse while we work out a long-term solution. Unfortunately, there is zero interest in Springfield to deal with the pension problem. We can rush to pass a legislative map without accurate census data, but sorry taxpayers pension reform will just have to wait. If we don’t fix these problems, the entire pension system is going to collapse and real people are going to get hurt. The unwillingness to deal with this issue is wrong.”

To read the full report, log onto https://wirepoints.org/.